Correct, junk bonds are not investment grade to investors. They also have a high rate of default.
DWSD bonds, however have the backing of the DWSD revenue stream. The bonds themselves were not being reduced in the Detroit bk as they are secured with the revenue from ratepayers/dwsd.
So, again, how are the residents of Michigan on the hook for anything? Perhaps it may help if you get your tinfoil hat out first.
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